(Bloomberg) -- A restructuring of Repsol SA’s Alaska drilling project is adding to the state’s woes in the midst of the biggest oil slump since 2009.
Repsol sold stakes in development and exploratory acreage in northern Alaska to its partner, Armstrong Oil & Gas Inc., for more than $800 million, according to a statement from Armstrong. The companies will defer the 2015-2016 drilling campaign initially scheduled to start this winter as part of the restructuring.
As many as 500 jobs on the state’s North Shore are in limbo in the restructuring, according to Anchorage, Alaska-based KTUU television station, citing comments from Jan Sieving, a spokeswoman for Repsol .
These are positions that haven’t yet been filled for the deferred drilling campaign, Sieving said Wednesday in an e-mail.
The restructuring comes a month after ConocoPhillips announced it would cut about 10 percent of its workforce, including 120 jobs in Alaska.
The state has been hit hard by crude prices falling more than 50 percent from last year’s peak amid a global glut. Petroleum revenue in the 2014 fiscal year was $4.8 billion and accounted for 88 percent of the government’s unrestricted funds. That’s expected to fall to $1.7 billion this fiscal year. The government had a partial shutdown for 12 days in June related to budget shortfalls.
Representatives of Armstrong didn’t immediately return calls and e-mails for comment Tuesday.
Once all options are executed in the deal, Repsol’s stake in the Colville River Delta area will shrink to 49 percent from 70 percent, and in another 750,000 acres of development land to 25 percent from 70 percent, with Armstrong taking 51 percent and 75 percent, respectively.
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